Talks With Chinese President Xi Not Possible Before Trade Deadline: Trump

02/08/2019

According to a news report published by Reuters, there are no plans of US President Donald Trump to meet his Chinese counterpart Xi Jinping before the end of the 90 day trade truce between the two countries that is being used by the two countries to strike a trade deal.

Trump clearly said “No” when he was asked about whether he would be meeting the Chinese leader. He was also asked by reporters the two leaders would be meeting up next month, Trump said; “Not yet. Maybe. Probably too soon. Probably too soon.”

These comments by Trump confirmed earlier remarks by officials of the Trump administration that there would unlikely be any meeting between the two leaders before the end of the 90 day deadline. The comments were a dampener to the optimism about the two parties arriving at a trade deal quickly. Such concerns also resulted in a drop in the US stock markets.

The 90 day truce in the trade war between the US and China was agreed upon by Trump and Xi last December in Argentina to allow both sides to hold negotiations on trade and possibly arrive at a trade deal that could eliminate US concerns over China’s trade policy.

The US had postponed the implementation of an increase in tariffs on import of Chinese goods worth about $200 billion from January 1, 2019. The deadline for the truce comes to an end on March 1. After a round of talks between the two parties in Beijing and Washington, another round is to be held in Beijing later this month.

Last week Trump had said that there is a possibility of him meeting Xi so that they could come to a final trade deal.

There were expectations among a section of analysts that Trump could hold a meeting with Xi later this month as a part of his trip to Asia where Trump is scheduled to meet North Korean leader Kim Jong Un in Vietnam. There was also a possibility that Xi would come to the US, Trump had indicated earlier.

There can still be a meeting between the two leaders at a later date, White House economic adviser Larry Kudlow told reporters. “At some point the two presidents will meet, that is what Mr. Trump has been saying. But that is off in the distance still at the moment,” he said.

The comments of Trump resulted in a sharp dive at the US stock exchanges as there was increasing optimism among analysts and investors about a trade deal being ironed out between the two countries before the expiry of the 90 day period – following which the additional tariffs would be imposed on a large chunk of Chinese exports into the US.

There was a 0.93 per cent drop in the S&P 500 Index which was the highest for it in the last two weeks. There was also a drop in the yields of Treasury bonds as investors shifted investors to the safer sovereign US debt instead of equity.

“I could see where that would impact the markets because obviously we had a lift in the month of January from optimism surrounding these trade talks,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.